The Interview

Matt O’Connell CEO of GeoEye

Q

Can you give an overview of GeoEye and its organizational structure?

GeoEye is a leading U.S.-based commercial satellite provider that offers geospatial information and insight to decision makers and analysts who need a clear understanding of our changing world to protect lives, manage risk and optimize resources. We have over 700 employees worldwide with primary offices in northern Virginia near Washington D.C. and Thornton, Colorado as well as ground stations located around the globe. We own and operate two commercial satellites currently in orbit: GeoEye-1 and IKONOS. We are currently building GeoEye-2, which will be ready to launch next year.

Our main areas of GeoEye’s expertise are:

• Superior Imagery Collection – we provide timely and vital insight for commercial and government customers around the world.

• Production Services – we convert high-resolution satellite imagery into precise, value-added, and customized products.

• Information Services – we provide on-demand subscription access to imagery and other location information, which is particularly helpful for soldiers in the field that need quick access to unclassified imagery. Our information services offerings includes a world-class predictive analytics capability that enables customers to glean insight from imagery.

Q

You were a long-time Wall Street M&A lawyer and deal maker turned CEO.

After moving to DC over 10 years ago, you ran Orbimage, which became GeoEye in 2006. Why did you decide that this was the job for you?

The private equity firm I was working for in New York in 2001 asked me to help restructure one of their portfolio companies, Orbimage. I went to Orbimage headquarters in Virginia to hire a new CEO a week after 9/11. It was supposed to be a two-month assignment, but I couldn’t find anyone who wanted the job. While trying to find a new CEO, I assumed the role on a temporary basis, actually living at a Holiday Inn near Dulles International Airport for 3 ½ years. As time went on, we achieved several successes and the investors asked me to leave private equity and run the company full-time. I had helped consolidate the cable industry and then the

radio industry and I realized that Orbimage could be a great platform to consolidate companies that provided insight to the intelligence community.

What I am most grateful for is the opportunity to build a company that helps save lives on a daily basis in numerous environments around the world.

Q

Over the past 10 years, you have led GeoEye to significant growth,

increasing the company’s overall enterprise value from $33 million in 2003 to $950 million in 2012. GeoEye has recently agreed to be acquired by DigitalGlobe. How does this fit into GeoEye’s strategy?

The combination of DigitalGlobe and GeoEye will create a global leader in earth imagery and geospatial analysis with more diversified revenue base, a superior financial foundation and significant growth potential. The new DigitalGlobe will be able to achieve a shared vision for the future that neither company could achieve alone. The cutbacks in U.S. defense spending created uncertainty for our investors and employees and the combination was an excellent way to realize value, provide the U.S. government with a compelling solution in a budget-constrained environment, and de-risk both GeoEye and DigitalGlobe.

Q

What are the next steps to complete the combination?

We need to receive regulatory approval to combine. DigitalGlobe, as the acquirer, is primarily responsible for this. While we cannot speculate on the government process, we wouldn’t have entered into the combination if we didn’t think that it made sense for the nation and would ultimately receive regulatory clearance.

We also have to get shareholder approval to combine. Given the substantial decrease in risk and the corresponding increase in value created by the combination, some of which has already been reflected in our stock price rise, we believe there’s a high degree of confidence that our shareholders will approve the combination.

On an emotional level, it was a little hard to sell a company I had built virtually from scratch. But it is a great result for the shareholders. And it will provide the most certainty for the greatest number of employees. So it was clearly the right thing to do.

By bringing the two companies together, the new, combined company will enable the U.S. government to meet the requirements of the EnhancedView program at a substantial savings to the U.S. taxpayer. In addition to the compelling savings, the U.S. government and other customers will benefit from an optimized constellation and better integrated imagery collection, processing and analytics capability. In return, shareowners should reasonably expect a more stable and predictable funding environment.

Q

Where do you see the future of the commercial industry headed?

The commercial satellite industry is continuing to grow and more and more industries are starting to discover the importance and value of satellite services. The competitive nature of the commercial market promotes innovation and accelerates the introduction of new services. As an example, the availability of high-resolution commercial imagery has accelerated the proliferation of applications using Google Earth and Bing Maps. GeoEye is also investing in geospatial technologies that are increasingly emphasizing how the world works rather than simply how the world looks. That’s where we see opportunity, and that’s why we’ve expanded into analytics, which supports a range of intelligence mission planning, counter-terrorism, counter-proliferation, and counter-narcotics functions.

Q

Is there anything else you would like to mention?

I take pride in how the company has grown. In the nine years that I was full-time CEO, we increased revenues from $7 million to about $355 million, a compound annual growth rate of 58%. That’s phenomenal. And we created the first really profitable commercial satellite imagery company at a time when most of the companies in the industry were losing money, even though we were one of the smallest and had no institutional backing or financial support.

The combination of DigitalGlobe and GeoEye will create a global leader in earth imagery and geospatial analysis with more diversified revenue base, a superior financial foundation and significant growth potential. The combined company will boast more diverse client base and derive about 50 percent of revenue from the federal government.